Personal Finance

Unintended effects of frequent strikes loom large

Dealing with striking workers is one of  the biggest challenges for managers.
Dealing with striking workers is one of the biggest challenges for managers. 

There have been several industrial actions in Kenya. I have always wondered whether workers have better ways of fighting for their rights.

Dealing with striking workers is one of the most difficult experiences for any manager. For that reason frequent strikes might create incentives for innovations that would reduce the consequences and pain of industrial action. Striking workers should, therefore, use the powerful tool with moderation in order to keep such innovations away.

If everyone decided to go on strike at the same time life would be unbearable. People would sleep hungry because farmers would not go to the farms, others would die of treatable diseases while you may not get that warm cup of tea. After a few days though people would come up with coping mechanisms to make life easier in a world without workers. Automatic solutions will gain popularity overnight. We would appreciate washing machines and all sorts of do-it-yourself approaches. Vending machines would also be all over. Urban agriculture will thrive as many realise that the backyard or kitchen garden may be all you need to feed your whole family.

The Internet traffic would grow tremendously as people visit websites to seek services that the striking workers would have provided.
Since the doctors and nurses would be on strike, many patients would avoid that visit to the hospital. It is estimated 50 to 60 per cent of hospital visits are unnecessary. Herbalists and miracle cures would also thrive.

Places of worship would also be full as people pray for divine intervention to keep disease away. The few hospitals still operating would develop new ways of dealing with a large number of patients. Same would happen to schools that could come up with alternative teaching methods.

Luckily, the above will not happen any time soon since we are so used to the current structure of life. We will, therefore, expect more strikes in the future as workers fight for better terms. Labour cost will also keep going up, taxes will also increase to fund government spending on salaries. Quality of life may also go up as the average worker gets paid better.

Professions that offer essential services may also be rewarded competitively. This will make them more appealing as role models to the future generation.

Another unintended consequence of the strikes is the increase in consumption and production of illicit alcohol.

As government raises sin taxes to honour pay deals with workers, the price of legal alcohol will increase, therefore, giving consumers incentives to embrace illegal brews. The effects of consuming illicit brews on health may also be another challenge. Smugglers will also be encouraged to buy sin products from neighbouring countries where taxes are lower.

A good consequence would be the stimulus effect that the new pay deals would have on the economy.

Given that hundreds of thousand workers will get a pay rise almost at the same time, this would result in an increase in spending, which could have a positive effect on the economy.

Such workers may buy more life insurance or save in banks or co-operative societies, which means that the government would also be able to raise more funds through bonds and Treasury bills from such institutions.

Another thing to consider is that the effects could be far reaching resulting in other reactions.

Impulse buying

For example, a recent research suggests that retailers in the developed world suffer from the law of unintended consequences. As retailers transition from human clerks to automatic check out technology this has led to consumers spending less time in queues.

This means that the shoppers spend less time shopping reducing the temptation for impulse buying leading to lower profits for the retailers. Human interaction has its advantages. As for the pilots, they are fortunate that autopilot cannot do everything in an aircraft.

The point is clear — the more the workers create nightmares for the employer the more the managers and customers are going to be looking for solutions to reduce the resulting frustrations.

In life, remember that, something always leads to another and it is not always what you expect. Brace yourself for the law of unintended consequences.

Mr Ngahu is the marketing director at SBO Research.
E-mail: [email protected]
Twitter @bngahu